The Real Ongoing Costs To Run A Dropshipping Business In Australia

Introduction

One of the biggest selling points of dropshipping is that it’s affordable to start. You don’t have to buy bulk stock, you don’t need a warehouse, and you can run your store from anywhere with Wi-Fi. But while the initial setup is relatively cheap, many new store owners underestimate the ongoing costs required to keep the business alive and profitable. Dropshipping isn’t free once the store is built — it comes with recurring expenses that directly affect your margins. Understanding these costs upfront is the key to running your business like a professional, budgeting correctly, and avoiding unpleasant surprises down the road.

Why Ongoing Costs Matter

In dropshipping, profit margins are already thinner compared to traditional wholesale models. Every recurring cost — whether it’s platform fees, advertising, or transaction charges — eats into those margins. If you don’t plan for these costs, you’ll quickly find that even though sales are coming in, your profits are shrinking. By mapping out ongoing costs in advance, you’ll know the minimum revenue your store needs to generate just to break even, and how much extra you’ll need to reach your income goals.

eCommerce Platform Fees

The first unavoidable recurring cost is your eCommerce platform. Most Australian dropshippers use Shopify, which charges a monthly subscription fee.

• Shopify Basic: $39/month

• Shopify Standard: $105/month

• Advanced Shopify: $399/month
  Most beginners start with the basic plan, but as your store grows and you need better reporting or lower transaction fees, you may need to upgrade. Alternative platforms like WooCommerce or BigCommerce also carry monthly costs for hosting, themes, and plugins. Whichever platform you choose, this is a fixed cost you can’t avoid.

Domain and Hosting Renewals

Your domain name is another small but ongoing expense. A standard .com or .com.au domain costs between $15–$20 per year. It’s not a major cost compared to others, but it’s an essential one to keep your store online and maintain credibility.

Apps, Plugins, and Software Subscriptions

While your platform covers the basics, most dropshipping stores rely on additional apps to optimise performance. These subscriptions quickly add up.

• Product review apps: $10–$30/month

• Upsell and cross-sell apps: $10–$50/month

• Email marketing software: $0–$30/month (free plans available, but limited)

• Abandoned cart recovery apps: $10–$20/month

• Currency converters and translation tools: $10–$30/month
  The average store owner will spend between $50–$150 per month on apps, depending on how many they choose to install. It’s easy to overspend here, so it’s important to track which tools are delivering value and cancel the ones that aren’t.

Advertising and Marketing Spend

Advertising is by far the largest ongoing cost in dropshipping. Without marketing, your store won’t attract visitors or make sales. Paid ads on platforms like Facebook, Instagram, Google, and TikTok are the backbone of most dropshipping businesses.

• Testing phase: $300–$1,000/month to gather data and find winning products

• Scaling phase: $500–$2,000+/month to drive consistent sales
  Influencer marketing also falls under ongoing marketing costs. Micro-influencer campaigns can cost as little as $50–$200 each, while larger influencers can charge hundreds or thousands per post. Retargeting campaigns — showing ads to people who already visited your store — typically cost another $100–$200 per month but often deliver a strong return. Unlike platform fees, ad costs are variable. You decide how much to spend, but without consistent advertising, sales will dry up.

Content Creation and Branding

Even though ads are the main traffic driver, you’ll also want to invest in organic content. This means creating posts for Instagram, TikTok, Facebook, or Pinterest. While you can make your own content for free, many store owners eventually outsource this work to freelancers or agencies. Costs can range from $100 per month for simple graphics to $1,000+ per month for full social media management. Even if you don’t outsource, you may pay for tools like Canva Pro ($15/month) or stock photo/video libraries.

Payment Processing Fees

Every sale you make comes with transaction fees. Shopify Payments charges around 2.4–2.9% plus a small fixed fee per sale. PayPal and Stripe have similar structures. This means if you sell $10,000 worth of products in a month, you could be paying $300 or more in fees. These charges aren’t optional, and while they scale with your sales, they’re one of the most significant ongoing costs to account for.

Supplier and Shipping Costs

While you don’t pay for stock upfront, many suppliers charge fees for access to their products or integrations. Subscription fees can range from $0 to $30 per month depending on the supplier. Some platforms bundle suppliers and automation together, which may cost $50–$100 per month. Shipping costs are another ongoing factor. If you use Australian suppliers, shipping will usually be faster and more affordable. If you rely on international suppliers, shipping can be slower and more expensive, and you’ll often need to absorb part of that cost to stay competitive.

Customer Service and Refunds

Customer service is often overlooked, but it’s an ongoing responsibility. As sales grow, you’ll receive emails, questions, and refund requests. Some store owners handle this themselves, but many hire virtual assistants to respond to messages and process refunds.

• Virtual assistant costs: $5–$10/hour (offshore) or $20–$30/hour (local)

• Refunds and returns: Variable depending on your niche and supplier policies
  Even if you keep customer service in-house, refunds and chargebacks are an inevitable cost of doing business. Budgeting for a small percentage of monthly sales to cover refunds is wise.

Accounting, Legal, and Compliance

Running an Australian business means staying compliant with tax obligations. Once your revenue reaches $75,000 per year, you’ll need to register for GST and submit regular Business Activity Statements (BAS). This often requires bookkeeping or accounting software like Xero or QuickBooks, which cost $20–$50 per month. You may also hire an accountant for quarterly or annual reviews, costing anywhere from $300–$1,000 depending on your business size. Legal costs such as registering trademarks, updating terms and conditions, or consulting with a business lawyer are less frequent but still important to factor into your yearly budget.

Optional Growth Tools

As your store matures, you may want to invest in additional tools and services to speed up growth. Examples include:

• SEO software: $50–$100/month

• Advanced analytics tools: $30–$100/month

• Professional product photography: $200–$500 one-off or subscription packages

• Email automation upgrades: $50–$200/month for larger lists
  While optional, these tools can give you an edge in competitive markets. They aren’t essential in the early stages, but they often become worthwhile once your store is generating consistent revenue.

Typical Monthly Costs for an Active Store

When all these expenses are combined, the monthly cost of running a dropshipping business in Australia looks something like this:

• Shopify platform and apps: $70–$200

• Domain and hosting: $2–$5

• Advertising and influencer spend: $500–$2,000+

• Payment processing fees: 2–3% of sales

• Supplier subscriptions: $0–$30

• Tools and content: $15–$100

• Accounting/bookkeeping: $20–$50
  For a small, lean operation, you might run your store for as little as $600–$800 per month, excluding ad spend. For a growth-oriented business, ongoing costs of $1,500–$3,000 per month are more realistic.

Why Planning for Ongoing Costs Prevents Failure

Many beginners only think about the upfront cost of launching a store. They spend on a Shopify plan, buy a domain, run a few ads, and assume sales will come. But the reality is that ongoing costs are what determine whether your business survives. Without consistent ad spend, traffic stops. Without customer service support, refunds pile up. Without budgeting for transaction fees and accounting, your margins disappear. Dropshipping is about building a system that runs month after month, and that system requires ongoing investment.

Final Thoughts

The real ongoing costs of running a dropshipping business in Australia may be higher than many beginners expect, but they are manageable with the right plan. While you can technically keep costs low in the early stages, the businesses that grow and last are the ones that budget realistically for marketing, customer service, and compliance. Expect to spend several hundred dollars per month just to keep the store running, and significantly more as you scale with advertising. By understanding these costs upfront, you’ll avoid cash flow shocks and build a stronger foundation for long-term success. Dropshipping remains one of the most accessible eCommerce models in Australia, but it’s still a real business — and real businesses come with real ongoing expenses.